To be covered against any unforeseen event, the usual thing is that both the tenant and the owner have their respective home insurance policies. But what is each party interested in covering? Making this clear from the outset will help to avoid future arguments and unpleasant surprises when a claim occurs.
When taking out home insurance, in order to understand what each party should be responsible for, the first thing to do is distinguish between building and contents insurance.
The protection of the property corresponds to the owner. He or she is responsible for maintaining its integrity and good condition. Therefore, your main interest will be to choose a home insurance policy that includes building coverage. If the property is rented furnished, it will also be in the owner’s interest to cover any damage that may be caused to the contents, e.g. kitchen fittings, furniture, appliances or anything else that has been left in the property.
The tenant must take care of their own property. Regardless of the coverage that the owner does or doesn’t have, it is advisable for the tenant to take out their own home insurance to cover the contents; in other words, the damages that may be caused to your furniture, computer equipment, clothing, jewelry, etc.
So now we know how to protect your assets. But what happens when we cause damage to a third party? Here the line is drawn by the cause of the damage. If a central heating pipe breaks and causes damp in the neighbor’s property, the cause is the property in which the pipe has broken, thus its owner is responsible. And what happens if the tenant leaves the tap running? In this case, the owner’s policy would not cover it, since the tenant is responsible for the cause of the damage.
Having home insurance is not required by law, but it is highly recommended. And although the owners cannot force tenants to take out insurance, it can be among the conditions agreed to at the time of signing the rental contract.
We now have the house covered and we have clarified the coverage of each party. What other risks can be covered? The most important, and the one that most concerns almost all homeowners, is the risk of default.
In recent years it has been customary to ask tenants to provide a bank guarantee for six or twelve months’ rental. This financial requirement, due to its cost and the difficulty of obtaining it, has prevented many potential tenants from renting a property. To achieve the owner’s peace of mind and give access to a larger number of people to the property, insurance for non-payment of rent offers a good solution. In the event of non-payment, the insurance company will pay the landlord the total amount of the unpaid monthly rent, lodging a claim for the amount against the tenant and initiating the necessary procedures for their eviction.
And what happens if the landlord does not want to return the deposit? This risk can also be covered. Insurance policies for tenants tend to include the recovery of deposits among their coverage. If the landlord refuses to return it to you when you decide to end the rental, the company will claim it on your behalf.
When it comes to renting, paying attention to insurance can be the difference between a good and a bad experience. Find out more. Having things clear and being adequately covered gives you greater peace of mind.